Lead-Lag Live
Welcome to the Lead-Lag Live podcast, where we bring you live unscripted conversations with thought leaders in the world of finance, economics, and investing. Hosted through X Spaces by Michael A. Gayed, CFA, Publisher of The Lead-Lag Report (@leadlagreport), each episode dives deep into the minds of industry experts to discuss current market trends, investment strategies, and the global economic landscape.
In this exciting series, you'll have the rare opportunity to join Michael A. Gayed as he connects with prominent thought leaders for captivating discussions in real-time. The Lead-Lag Live podcast aims to provide valuable insights, analysis, and actionable advice for investors and financial professionals alike.
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Lead-Lag Live
Timothy Sykes on Mastering Penny Stocks, Navigating Volatility, and Aligning Wealth with Philanthropy
Renowned trader and educator Timothy Sykes joins us to unravel the fascinating story of his pivot from a promising tennis career to mastering the stock market with his bar mitzvah money. Imagine an injury altering your life's path so dramatically that it leads you to become a millionaire trader. Timothy's journey offers a tapestry of invaluable lessons—from his initial trading days to managing larger accounts and eventually dedicating himself to teaching others. Explore how his background in tennis and philosophy shaped his unique trading mindset, allowing him to navigate the ever-changing market landscape with precision.
We explore historical financial crazes, like Tulip Mania, and draw parallels with today's crypto phenomena, dissecting how social media fuels speculative bubbles. Timothy shares his insights as a penny stock trader, illustrating the crucial role of historical study and market dynamics in handling volatile stocks. He emphasizes strategies like cautious trading and quick loss-cutting, intertwining these with his personal mission of aligning financial success with philanthropic endeavors, such as building schools worldwide. Timothy's narrative is an inspiring example of turning trading profits into meaningful change.
In our conversation, we highlight the importance of understanding market sentiment, especially amidst speculative spikes and unsustainable euphoria. Timothy shares stories of successful students like Jack Kellogg and Tim Grittani, underscoring the dedication needed to thrive in trading. He reveals personal strategies for combating over-trading, embracing a flexible "laptop lifestyle" that allows him to manage impulses and travel the world. We conclude by reflecting on finding one's unique trading approach and tailoring strategies for small account holders, offering a wealth of insight for traders at any stage of their journey.
The content in this program is for informational purposes only. You should not construe any information or other material as investment, financial, tax, or other advice. The views expressed by the participants are solely their own. A participant may have taken or recommended any investment position discussed, but may close such position or alter its recommendation at any time without notice. Nothing contained in this program constitutes a solicitation, recommendation, endorsement, or offer to buy or sell any securities or other financial instruments in any jurisdiction. Please consult your own investment or financial advisor for advice related to all investment decisions.
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Play the music video. I'm going to find it. I'm going to find it.
Speaker 2:I'm going to have my editor. No follow, no cry, I'm going to have my editor put it in the podcast.
Speaker 1:We're going to look back in history and this will be tulip mania. At least tulips are beautiful. This is why I love history so much. Patterns repeat, you know. So you have the dot coms, then you have the dot IOs and the chat GPTs. Like you can have the hottest market in the world. But if you don't know how to cut losses, if you don't know how to manage your risk, if you don't know how to manage your position size, you're going to lose.
Speaker 2:This should be a good conversation with Timothy Sykes, who I don't actually know much about. I just know that he engaged positively and he seems to think, like I do, that everyone's losing their minds in this market. We're going to be talking about a lot of different things his journey as a trader and where he's at as well. So, with all that said, my name is Michael Guy, a publisher of the Lead Lager. Joining me here is Mr Timothy Sykes. Tim, I don't know much about you, but I get the sense that you've done pretty well in the trading game. So introduce yourself to the audience and to me. Who are you? What's your background? Have you done the right, your career? What are you now?
Speaker 1:Sure, I've been trading for 25 years. I got started with my bar mitzvah money 12 grand. My parents gave it to me. They thought I would lose it all in the stock market. It would be a good lesson for me. Instead I got obsessed with the markets Back in 1998, 1999, the markets were going crazy. I was a tennis player. I had surgery on my arm my dad now calls it the million dollar injury because I had nothing else to do. I couldn't like walk around or do anything. I had two casts of my arms. After surgery my tennis career was busted.
Speaker 1:But I got obsessed, you know, trying to trade patterns and I gravitated towards low price penny stocks, which the whole world hates. But I saw volatility and it was good for my small account. So turn the 12 grand into 100 grand senior year of high school, then nearly 800 grand freshman year of college and I was hooked Up and down since then. I got way too cocky. Making too much money in my early 20s Was in a few reality shows, acted like a douchebag, I think actually business week. The first time they used douchebag in a title was for me, so I have that on my resume.
Speaker 1:You know, built my business of teaching because I learned that even though I basically turned 12 grand into nearly $2 million before I graduated college, I'm just not that good at trading with a big account. So I had a hedge fund for a few years. I sucked at it. I could make 20% on like the little $3 million fund that I had, but every time I tried to go bigger I would screw up. So I got into teaching because the reality show like Wall Street Warriors was a hit and it gave me an audience and I knew that I could teach about penny stocks, which no one else really does in an honest way. I wasn't a promoter, I was short selling a lot of the scams back then. Now there's just too many scams and short sellers have toxic, miserable lives, so I only go long. I haven't shorted. In three years Now my career earnings are up to nearly $8 million. I trade with a small account. I donate all my trading profits to charity. I teach people. I've got 40-plus millionaires so far.
Speaker 2:The Wolfs of War. I actually do remember that show. Hey, that's a blast from the past. That was like what 2014?
Speaker 1:2006 was Wow, yeah, I was in season one and I was going to be in season three. They filmed season three. They never aired it because they actually got some hedge fund manager losing tons of money during the 2008 crash and apparently he bought the show so that it never aired interesting interesting okay, yeah so I want to go back to actually to the tennis bit for a second here.
Speaker 2:So so you were on the pathway to going pro. Is that what it is?
Speaker 1:yeah, I mean high school. I was like number one in connecticut, uh, where I grew up. Um, I had, uh, you know, early entrance to tufts. I was going to be on their tennis team. Then I had Tommy John surgery and it screwed everything up. Didn't really have confidence in my game after that. Every time I was always worried about my elbow, like I thought that I got shot when my elbow just blew up, basically. But I got into trading and it was so much better Like I probably would have failed as a tennis pro. I'd probably be bumming rich kids for private lessons at a country club outside the city, so it would have been miserable. And instead I got into trading and it changed my life.
Speaker 2:Is there anything about the game of tennis that, as you were doing it, as you look back, that made you have certain skills that made you better as a trader? I'm always kind of fascinated by how skills transfer over across different domains.
Speaker 1:Yeah, I mean, I think anybody who's a really high performance athlete learns about work ethic. I'm waking up at four or five in the morning playing tennis every day, 5 to 6 am or 5.30 to 6.30 am before school. After school I'm playing, I'm lifting, I'm having like pure protein. So, yeah, work ethic is good. But also in college, I still went to college. I was a philosophy major and that taught me the most about thinking differently. All my friends were business majors and econ majors and I studied that stuff on my own for fun. So I was like I'm not going to pay for this philosophy I wasn't very good at, but it taught me to think different and that's been the biggest thing for me as a trader.
Speaker 2:Okay, so you started dabbling in the low price kind of penny stock area. I assume you did that because you just liked the volatility and were hoping for a couple of these kind of big, huge winners. Talk me through sort of the first real major winner for you. What was it and how did you even position for it and find it?
Speaker 1:You're going to laugh. So my first strategy was buying companies that added com to their corporate name. They would put out a press release hey, we used to be Sportsman Guide, now we're Sportsmansguidecom. The stock would triple over like three or four days. I never had patience. I never held for the doubles or the triples or the quadruples. I would take 20, 30% gains in a day or two. But there might've been. This was back in 1999 and 2000. There might've been 500 or 600 different companies that added com to their name. Now the same pattern actually made me quite a lot of money in 2022 and 2023, where companies were integrating with chat, gpt and then adding dot IO to their corporate name. History repeats. So that was my first pattern, my first $100,000 win.
Speaker 1:Freshman year in college I was in this dorm room and you know I was buying a lot of these crappy stocks that were just breaking out. A pattern that worked back then and still does, is buying a stock on a Friday, selling it on a Monday when the stock has a news catalyst and everyone you know buys it or tries to buy it Monday morning because they're lazy. They don't hear about the news necessarily on Friday, when a lot of people tune out. Back then cell phones were very fuzzy and there was a company called Illinois Superconductor ISCO was the ticker. They claimed that their superconductive technology would make cell phones less fuzzy. They said, hey, on a Friday we're putting out they put out a press release, we're going to be on TV on Sunday. Back then I didn't know anything about short selling or anything. I mean this was 99 and 2000. Thank God, I was just ignorant, blissfully ignorant, and I believed them and I said you know what? They're putting out? The press release. They already did the interview, so it's probably going to spike up.
Speaker 1:So back then I traded way too aggressively with my account. I had made about a quarter of a million dollars at that time as a college freshman and I put $170,000. So basically three quarters of my net worth into the stock. It had already risen from five to 17. On the week I bought 10,000 shares, thinking it was going to gap up to 20, maybe 22 on Monday If the interview was positive. Sure enough, the interview was positive. It didn't gap up to 20 or 22. It gapped all the way up to 29. And I took $120,000 in profits. I did three laps around the quad just running, screaming, and I took my whole dorm out to dinner.
Speaker 2:There's a nice little comment from somebody watching on X saying I just want to say Timothy is one of the few good guys in the penny stock space. He called out the fraud LTNC a couple years ago and I have great respect for him because of that. Let's go in that direction. I don't actually know anything about this, so what's he talking about?
Speaker 1:So LTNC is just one of the many you know pump and dumps that have come and gone over the years. I mean I used to short sell, right, I used to short sell them all. Ltnc never really got up high enough, like I used to expose a lot of scams where there were no shares to short or the price wasn't high enough to short. I'm not going to short like a two, three, five cent stock. It doesn't make any sense. But I'm still calling out the promoters. Ltnc, you know, just promoted so much. They had all these different schemes and different executives promising different things. And you know this is how I grew my teaching business where, even if I can't personally short sell the stock for pricing reasons or no shares to short, I can still teach how these promotions work.
Speaker 1:And you know I've called out literally hundreds of different pump and dumps. Ltnc was one of them. Nikola Motors, nkla was another where the CEO, I guess, eventually got busted for fraud, but not before he pumped up the stock and made billions and he blocked me on Twitter. Michael Saylor also blocked me on Twitter and that pump is still going with MicroStrategy. So it's my duty to try to call out this BS. I used to short sell, but it was just so frustrating. I even made a music video I don't know if you can link it called no Borrow, no Cry, where I talked about 77 different pump and dumps that I saw and I could not short because there were no shares to short. Back then Play the music video.
Speaker 2:I'm going to find it. I'm going to find it. I'm going to have my editor. No Borrow, no Cry, I'm going to have my editor put it in the podcast.
Speaker 1:It's a ridiculous music video.
Speaker 2:I used to do them just for fun, just to like show how many pump and dumps it was. Well, I'm sure there's tons of them and and it's funny because now we're we're in a pump and dump environment where it's happening on a bigger scale with larger companies and I'm too scared to short.
Speaker 1:these days I just ride up like I say, look, this is a pump and dump or it's a short squeeze or some kind of scam. But I'm just just going to ride it for a little bit and you know, I've adapted because I've just seen the squeezes get so much worse and riskier. And you know, frankly, like I've learned, even though I've made nearly $8 million in trading profits, I'm not that good with big size and I'm not good with a lot of these squeezes that can go from, like you know, two to 20. And now they're going from like two to 50 in a few days.
Speaker 2:I'm curious to hear what you think about crypto then, given all that.
Speaker 1:I mean again, it's the whole. You know tulip mania. This is the digital version of tulip mania. Tulip mania back in what 1636, I believe so, nearly 400 years ago. What 1636, I believe so, nearly 400 years ago. And tulips, I mean the price of tulips rose so much only because there was always another buyer. I think they rose about 55, 60 times. So crypto has risen much more. You have absolutely ridiculous projects like Fartcoin where, even though it's down off its highs, it's still worth nearly a billion dollars.
Speaker 1:We're going to look back in history and this will be tulip mania. At least tulips are beautiful. You know a lot of these cryptos and the meme coins and the NFTs. I mean, society is going to look back and they're going to laugh and it's going to be like how could we be so ignorant? And it's just because people don't study history. People have a lot of free time. Social media spreads everything even more. I mean they've basically built the perfect mousetrap for a lot of these cryptos and schemes. So you could say that it's tulip mania. You could say that Michael Saylor is a modern day Ponzi.
Speaker 2:What do you tend to gravitate towards now then? I mean, the thing with scale, obviously, is, if you're going to do penny stocks, it's a lot riskier. You can argue, right, it's easier to I'd say YOLO, because you're doing due diligence, right but it's a lot easier to take a big portion of your portfolio and put it into penny stocks when it's a small portfolio. But yeah, the size that you're at, I mean, have you, have you moved up the market cap scale?
Speaker 1:So I still trade penny stocks. I go back to a small account every year. Some years I go back to my $12,000 starting stakes. Some some years I started at 50,000, but I just tried to make a few hundred thousand dollars and I've been averaging like two $300,000 a year for, you know, the past decade or so. Again, I donate all the trading profits to charity. I'm showing the process to my students via video lessons, webinars. You can see my screen watch list commentary.
Speaker 1:Like you know, I always try to show people how these plays are going up and down, how I'm trying to like capitalize on that. And I'm taking, you know, like 1,000, 2,000, 3,000 share positions. So I don't do it for the money anymore. And I'm taking, you know, like 1000, 2000, 3000 share positions. So I don't do it for the money anymore and, frankly, it's better, because trading after 25 years is is not something you want to do aggressively. It can be very stressful. Even the people that make a lot of money, that I know, who have been in this game for a decade or two, they just want to retire. They, they hate, they hate it, but they're stuck because they need the money.
Speaker 1:For me, I changed the game, where I still love trading because I donate it and then I just got to Dubai from Bali. We have 56 schools now in Bali, 123 schools that my charity has built around the world. So I think that you can make trading however you want. You can go long, you can go short, you can trade big, you can trade small, but you have to know how the game works and the problem that you see with your followers and I see with my followers and students most people don't study history and they don't know how it works and then when something rises, it becomes a self-fulfilling prophecy. So when Michael Saylor says something and it rises, that must be true. But people should really read the book like Ponzi's scheme and you'll see like crazy similarities or extraordinary popular delusions in the madness of crowds. All these historical books, it's just history repeating in different versions. It's sad.
Speaker 2:Let's talk about timeframes. So, as a trader, are you doing short-term intraday? Are you doing swing? Weekly, monthly? What timeframes are you looking at?
Speaker 1:So usually one to two days. I still use the strategy buying a stock on a Friday, selling it on a Monday. It's crazy how that stupid strategy still works. But with penny stocks you're not competing against the smartest people, right, like LTNC. It was so obvious that that was a complete pump and dump and it was laughable that I have to explain this basic stuff.
Speaker 1:I have the easiest job in the world. I just have to break down SEC filings and stuff like that. But a lot of these moves are 50, 100, 200% moves in one to two days and I again personally do not have patience. Even when a stock doubles or triples, I usually sell too early and I like locking in singles. So for me as a trader, I actually teach trading volatile stocks. Yes, penny stocks are volatile and risky, but I think that you can trade them in a cowardly way. I have a video that's called Cut Losses Quickly where for 30 minutes I just say cut losses quickly. My average loss is like 2, three, sometimes 4%. My average gain is like seven, eight, 9%. I trade the most active penny stocks. They're trading tens, if not hundreds, of millions of shares, sometimes even billions of shares on the day, but I just try to take my piece of the move.
Speaker 2:You had mentioned, com was sort of the first initial strategy and it works until it doesn't. So the question to you is how do you know when something like that's no longer working, other than just suddenly going through losses?
Speaker 1:So it's fascinating. Back in the year 2000, I made $750,000 roughly the first four months. This is when the NASDAQ went from 2000 to 5,000. And I'm like, extrapolating, I'm like, oh, at this rate, with bigger size I'll be a billionaire. And I'm looking at the billionaire list I was like, yes, I would like to be number 43. Mind-blowingly dumb, because I had no idea that I was riding the bubble. I didn't have perspective at the time, I didn't study history, and then the last eight months of the year I lost $10,000 because my patterns completely stopped and that actually forced me to learn short selling.
Speaker 1:So you, if you're in this game, you know trading whatever strategy. You see patterns working. You see where you can be more aggressive, like if you sell too early, which I usually do and then I try to be more aggressive. Maybe I try to take a little more size, or I, instead of trying to make eight or 10%, I try to make 15 or 20%, because I see that I'm too safe. But then sometimes the patterns just disappear and you have to adapt. But the good news is this is why I love history so much Patterns repeat, you know.
Speaker 1:So you have the dot coms, then you had the dot IOs and the chat GPTs. I made a lot of money years ago trading the Ebola stocks. Then I made a lot of money trading the COVID stocks and actually some of the stocks were the same stocks years apart. So for me it's recognizing these patterns and trying to play them. I don't win 100% of the time. My win rate is like 70%. But again, if you cut losses quickly where your losses are smaller than your gains and you win more often than you lose, it's really tough not to grow your account. At least you know, especially with a small account. I have never mastered the art of trading with millions of dollars. I found my sweet spot, you know, trying to make like 1000 or $2,000. And that's frankly why I'm a spot. You know, trying to make like a thousand or two thousand dollars, and that's frankly why I'm a teacher.
Speaker 2:You know that's a useful skill for most people. Let's talk about how you identify some of these, because from everything I'm hearing from you, it sounds like you're much more almost thematic, like you see a broad theme and then you kind of go into really small stocks that could benefit from. Yeah.
Speaker 1:Yeah, I mean I've been riding a lot of these quantum stocks. I think these quantum stocks are a joke RGTI, laes, qubt, qbts, qmco and I'm buying breakouts whether they have a big spike pre-market. Lately I haven't been getting sleep. You can see my eyes are extra tired right now because we're getting 4, five, 6 am spikers which we never really got before. So I'm looking for these pre-market spikers. Sometimes I buy them pre-market, sometimes I like to wait and then I'm looking for a breakout over the pre-market highs.
Speaker 1:Early shorts like to take big positions and then they try to fade them all day. There's a lot of short selling accounts where you know they just try to fade them and where do short sellers put their stops? At the high of the day or near the high of the day. So when a BS company like these quantum stocks or these AI stocks or robot stocks or crypto stocks, you know when, when any of these companies fade and then, you know, reclaim the high of the day or get close to the high of the day, they tend to really burst out. So I'm buying the breakout on the high of the day and it's clear as day to see. You know, sometimes hours ahead of time I mean right now, as we're doing this, you know video XXII I don't know if you can pull up charts I mean this broke out this is a company that wants to do like less nicotine and this is something that but the Biden administration is doing like last second less nicotine and cigarettes XXII.
Speaker 1:Put out a press release this morning saying we approve of Biden's plan to do less nicotine, obviously because it's their, their entire business. They're like a 10 million, five, 10 million dollar company. They spiked pre-market. The high was just around uh eight in the morning and then just 11 30 am, just took out the day high at eight dollars a share and went to 12 a share even as we were starting this am I seeing this right on the price here, that this was as high as this and just what?
Speaker 1:it never got to that high.
Speaker 1:They're just doing reverse splits yeah, yeah sure, the charts are bad but, like you can see, the trend is pretty bad. It's a terrible company, but then look intraday and it's just a beautiful one day spiker. So, like I don't like nicotine, you know stocks this isn't my, my kind of wheelhouse, but this is basically the pattern where I'm. I'm trading all the worst of the worst stocks. They're full of short sellers, then when they take out the day high, they squeeze the shorts. It's not that, it's not rocket science.
Speaker 2:Talk to me about sizing. How do you even identify not just a stock, but how much do we actually risk into it?
Speaker 1:Yeah, I mean. So, like again, my sweet spot over 20 plus years is, on average, making $1,500 or $2,000 on the day. So you know, knowing that, knowing what I'm good at, I mean I can buy, let's say, a thousand, 2000 shares and try to make one or $2 a share. I really try to keep it simple for my students. Sometimes, you know, I double up, sometimes I sell half my position, but but by and large it's just trying to take the let's say, 5%, 10%, 15% gains and cut losses if it doesn't break out. Sometimes you try to buy a stock as it hits the day high and, for whatever reason, there's a wall of sellers and then the shorts really pounded into oblivion.
Speaker 2:So when I was sending you a DM, I said you know what should we talk about? You said we should talk about how everybody seemingly is getting bulled up like crazy, thinking you're never going to have another pullback or correction or bear market ever again. Let's talk about sentiment for a bit. Where are we? First of all, what's your sense of? Because I always get like I always mention sentiment and then people are like oh, here's the CNN Fear and Greed Index, which doesn't measure a damn thing as far as sentiment goes.
Speaker 1:I mean literally yeah, I mean I don't really use indexes, so for me, like I'm looking at just how many like big spikers are. I mean just to start off like 2025, I mean almost every single day for the past I would say month, actually, even two months lately every single there has been half a dozen to two dozen stocks penny stocks that are up 100, 200, 300, 500% on the day, trading hundreds of millions of shares. I mean PHIO as we're filming this, is up 300%. We're filming this midday. It's a $6 stock. It's already traded 200 million shares. By the end of the day it'll trade 400 million shares 200 million shares. By the end of the day, it'll trade 400 million shares.
Speaker 1:Slrx another biotech is up 150%. So I'm looking to see are there ridiculous, insane spikers? They were up even more like an hour ago. Now shorts are coming in a little more aggressively. But I'm looking to see can we get those big spikes? And I'm also looking at not just the big percentage gainers but also like sectors right now Robot stocks, robotics stocks are getting crushed, quantum stocks are getting crushed and AI stocks are getting crushed. Those were three hot sectors of the past few weeks. So you know you can have these indexes. I mean there's. There's all sorts of ways to analyze this For me.
Speaker 1:I'm so focused on low price stocks and hot sectors the past few weeks and months it is unsustainable. Okay, we're not gonna keep having all of these four, five, 6 am spikers. We're not gonna have a dozen, two dozen, three dozen stocks up 100, 200, 300% every day for much longer. I frankly wanna crash. I've been praying for a crash. I want time off.
Speaker 1:I've gotten really fat and unhealthy the past few weeks and months. I actually lost money in December because I was there was just too many plays, I mean. I got sick and I was trading from Asia not a good place to be with, you know, round the clock, big percent gainers. So I think that we're near max euphoria in terms of just speculative junk spiking. But at the same time, like you said before we began this podcast, like you said, you've been expecting a downdraft and you've been wrong for the past year, year and a half. Same right Like. If you look at a lot of hedge funds, their performance is pretty bad just compared to the S&P 500, let alone, you know, the biggest tech stocks. Everybody with a brain who studies history thinks that we're overvalued, but obviously you know, valuations can be stretched longer than short sellers can remain solvent. So this is part of the reason why I don't short sell. If I was a short seller, I would be broke or I would be very.
Speaker 2:Yeah, and I always make that point, shorting really does not work over any period of sustained time, especially if you backtest it. I mean, maybe you can argue selectively, but I'd argue that's a little bit more luck than anything else and it's better to just either be long, only other defensive assets like gold, for example, or utilities, or the dollar, which has been on fire. Speaking about the dollar, do you track currencies at all? I'm curious if you have any thoughts on the dollar. Do you track currencies at all? I'm curious if you have any thoughts on the dollar.
Speaker 1:So I mean I trade with a small account and I stay pretty liquid. So I have dollars, a lot of dollars, and you know I'm very happy with it. I know that a lot of people complain about America, but just compared to a lot of other countries, I mean America is looking pretty damn good in terms of our economy, in terms of growth, in terms of inflation, in terms of our currency. You know, I travel all around the world, I visited 40 countries last year, so I see a lot of these other countries and Americans, frankly, are just spoiled.
Speaker 1:You know, I don't know if you remember the movie WALL-E where everyone at the end of it, like when the robots actually meet the humans, they're all fat and they're all like sliding around in their little you know pods. That's pretty much America. America is, you know, the wealthiest society in the history of mankind and you know that leads to ignorance, that leads to laziness and I think everyone's really just spoiled. But at the same time, no one can compete with America in terms of technology, efficiency, growth. Almost every other country, and especially areas like Europe, they've just been regulated to death and it's almost impossible to compete with America in terms of business.
Speaker 2:So if you're uncertain about markets and you're bearish and you're not shorting, are you trading smaller? You mentioned cash, but how much of your portfolio did you put into cash? What would make you say I've been bearish for too long, I've been wrong, it's time to actually start deploying. So I think it's easy to say, well, I'll just be in cash and wait it out, but kind of I mean, I've stayed in cash for far too long.
Speaker 1:I should have just invested in the S&P 500. You know, I just trade with my small account and, frankly, the rest is is cash. I bought, you know, some apartments for my parents to live in and move them down to Miami Beach, so I was happy with that. And then, you know, I'm very proud to donate not just my trading profits but also you know personally, about eight million dollars outside of my trading profits, but also, you know personally about $8 million outside of my trading profits to charity. You know I should be a long-term investor but I just am conflicted because, yes, I think America is is the best business wise, but the valuations are so stretched and I just, you know every, every potential crash I would think like this is the big one. Like you know the, you know Japanese carry trade I just see landmines everywhere.
Speaker 1:But frankly, I've been wrong so I'm not shorting. I also don't want to chase. You know, I think that's that's a very dangerous tendency, where you know if you're wrong and you're missing out, and then you're like you give in and then you're like screw it, you know, let me go in. That's actually the worst time because then you're investing for the wrong reasons and that's usually like capitulation Right. So, like during max euphoria, that's when everyone throws their money in. They're like I can't miss this anymore. Like when crypto hits 100,000, that's a big catalyst for a lot of people who missed the run up to buy, and then that usually signals the top.
Speaker 2:You mentioned you taught a lot of traders. Let's talk about what you think makes somebody a successful trader, what personality traits. And are there some people that just can't be taught because the emotional side just prevents them from doing the right stuff?
Speaker 1:No, are there some people that just can't be taught because the emotional side just prevents them from doing the right stuff? No, I mean, I think anybody can be taught, but you need to really think outside the box. Like trading is very counterintuitive, like I said, you know, like where everyone's celebrating 100,000 with crypto and I'm sure a lot of people are buying in bulk and they're like 100,000. Now we're going to a million and then, you know, here we are several weeks later and we're down, you know, 10%. I think that you have to really recognize that human psychology plays a big part in trading and investing. And you know again, for the vast majority of people just invest in the S&P 500, 8 to 10% per year on average. That's very good Passive income and, like I said, I think America is strongly positioned and obviously lately we've been doing even like 15% to 20% on the S&P 500. But trading specifically like speculative assets whether you're trading crypto or NFTs or penny stocks or anything you have the ability to grow your account exponentially, which you can never do with the S&P 500. So if you do want to try to grow your account exponentially, I think it's possible, but you're going to have to be so dedicated.
Speaker 1:Like I said, I have 40 plus millionaire students, but a lot of the ones who are the top students, like Jack Kellogg, former valet, was watching my YouTube videos while parking cars. Tim Grittani was a former state farm insurance agent. Tim Grittani turned $1,500 into a million in three years. We got profiled by CNN. They looked at all of his statements. Now he's at $16 million. Jack Kellogg, you know, $20,000 now into about $15 million. But they have no lives. They're studying this stuff every day. Jack Kellogg is so determined to be there for the pre-market spikers. He's been going to bed at 8 or 9 pm every night, waking up at 2 or 3 in the morning and then trading all day, every day, which you could say borders on obsession, but I think obsession in terms of trading and learning is very good.
Speaker 1:It's a fine line, though. Right Like, for me, I'm like an addict. I say that I'm like the alcoholic bartender. Right Like. I have an over-trading problem. Part of the reason why I travel so much is because I have, like crazy fingers where I want to trade all the time. But if I'm jet lagged, if I don't have good wifi-Fi, I prevent myself from trading. Like I'm filming this. This is in the middle of the night. I'm going to go to sleep. I'm going to miss the afternoon. I already had a really good morning of trading.
Speaker 1:So I think that you have to really know yourself, you have to learn about the markets and you have to be like borderline, insanely dedicated to learning everything and understanding that it's not an exact science. Like forget about your indexes, forget about your specific valuations. A lot of this is very momentum driven and discipline driven. Like you can have the hottest market in the world, but if you don't know how to cut losses, if you don't know how to manage your risk, if you don't know how to manage your position size, you're going to lose.
Speaker 1:And if you're trading a lot of these volatile stocks, a lot of these penny stocks, if you hold too long, they might be up 100, 200, 300% in the morning and finish unchanged or even down on the day by the afternoon, like it is very quick. So you have to be extra prepared. I say that this is like a battlefield and you know, if you're unprepared on a real battlefield, like if you know you're a new soldier and they give you a gun and you don't know how to use it and you don't know where to hide and you don't know the angles. I mean you're going to get annihilated, which is what most people do in trading. Like, 90% of traders lose.
Speaker 2:What do you think is riskier trading penny stocks or trading options?
Speaker 1:I've never traded options. You've never been tempted to. I've seen a lot of people that it's really difficult with, you know. I mean some of the stocks that I trade are optionable, but like it's really difficult to cut your losses very quickly. Um, you know, on my website profitly, we tried a few options newsletters and they just don't last like it's. It's crazy. Like during good times you can make a lot, like you, your, your options can make many times over what you put in.
Speaker 1:But for me, everything comes down to controlling my risk, controlling my potential for losses. I've had some big losses in my career. It's the worst feeling in the world and I don't want that. So I don't want to take a trade if I can't control the risk. And from what I've seen, I haven't personally traded options. I mean, maybe it would be different if I'm trading options on, like Google or you know, a big company, but the options on the penny stocks are absolutely insane and I always stick with penny stocks because I've been doing this for 20 plus years. I just know the niche inside and out.
Speaker 2:There are a lot of penny stocks, right? I mean like tons. How many penny stocks do you typically hold in any single moment in time? What's the diversification like?
Speaker 1:One at a time, my focus is on one. I don't have a portfolio. I'm literally focused like, okay, here's a pattern. Sometimes I have two, but very rarely. I like to see every single tick Again.
Speaker 1:I have my finger on the trigger, like if it's not breaking out where I'm buying a stock, let's say on the high of the day, breakout. If it's not breaking out, I get out. Sometimes for a small gain, sometimes a small loss. If I'm dip buying a morning panic and it doesn't start bouncing, and you know, you know some of these plays can just keep going down, I get out. So it's really tough for me to say, oh, let me have like five different stocks or different, you know, buckets of sectors.
Speaker 1:I trade with one laptop. So I keep it very simple one stock at a time, one laptop. Like I said, my average gain is a thousand or two thousand dollars on the day. When I lose, I lose like three or five hundred dollars. I really dumb my stuff down to prevent me from overtrading, to prevent me from losing big, because you know, at this point in my career I just don't want either and I really like to stay in this groove. When I teach people, a lot of my top students make fun of me. They're like Sykes, you've been trading for you know a quarter of a century and you trade like a freaking coward. And I'm like, yeah, I do, that's me.
Speaker 2:Do you typically go back to the same penny stocks you've traded before?
Speaker 1:Yeah, I mean there's certain ones. I mean, like a lot of these drone stocks and these AI stocks and these robot stocks, like they make multiple highs of the day. They have multiple breakouts over several days and several weeks. So a lot of it is just a waiting game. They move in waves sometimes. So sometimes you know I might not trade it for like two or three days but then when the strength looks better I might trade it. But you know there's definitely thousands of penny stocks but I'm trading the most active and I'm trading the biggest percent gainers. Most penny stocks trade a few thousand dollars on the day. That's irrelevant for me and my students. Like we're trading stocks that are trading tens, if not hundreds of millions of shares on the day. You have that volatility. You have that liquidity.
Speaker 1:Once upon a time I lost a million dollars believing in a company, cygnus E-Transactions. I believed in the technology. They basically invented printed home ticketing, but they turned out to be an illiquid penny stock. And it doesn't matter how good your technology is, especially with penny stocks there's so many you know just things in the closet that they don't, they don't want to show. In an illiquid penny stock you can't cut your losses. It doesn't matter what you do. So I never want to be in another situation like that, where I had a big position in the company. I was right about the technology. You know, printed home ticketing took off, but obviously I lost, you know, seven figures, holding an illiquid penny stock pretty much all the way down.
Speaker 2:Which I think is one of those. This is actually a lesson about cutting your losses early. What other sort of major lessons have you learned just from experience that you try to impart on others?
Speaker 1:Yeah, I mean like staying in your groove, finding your groove, like I know that I'm very different than most people. Like I speak at conferences sometimes because I have a big mouth and I, you know, been on a few TV shows and I have a pretty good social media following. And it's funny when I speak at conferences where I'm speaking with people who manage, you know, hundreds of millions or at least even billions of dollars. I remember I was on stage with Peter Schiff and a bunch of other, you know, multi hundred million dollar hedge fund managers and backstage I was trading Fannie Mae. Fannie Mae was a stock that was spiking on the day and I was literally trading backstage before our panel started and I locked in the profit because, you know, I had the panel starting and I was like, oh, this is going to be a good lesson where, if you're on a speaking panel or you know you have a busy day, you get out of the stock, like I wasn't going to be able to check the stock while I'm speaking on the panel. So I locked in $350 in profits and I told the audience this I was like I just nailed Fannie Mae, I made 350. And the panelists were laughing. They're like you only made $350,000 and you're proud of that. I was like no, no, no, $350. And they were so confused because even $350,000 is chump change to them when I'm talking about something much smaller.
Speaker 1:So I think that you have to understand that there's a whole world of big hedge fund managers and big traders where it's all about you know, trying to make as much money as possible. None of that is applicable to people with small accounts, so I've gravitated my entire teaching business to focus on how do you make three, four $500 on the day. That's what 99% of people need to learn how to do, and I think that with penny stocks and if you trade them cowardly and you have rules in place, I think that you can do it. I think that you can use your small account size to your advantage. Most people wanna trade big. They can't wait to trade big. That's them trading For me. I go the opposite way and I think that's really useful to the common person. That's why I really love teaching.
Speaker 2:Since you switching gears mentioned, you traveled all over the world Any favorite spots. That like if you were a trader and you really want to aspire to make a whole bunch of money. It's like this is the place I would retire to and trade in.
Speaker 1:Yeah, I mean, look, I love Japan. I love the food, the culture, the history, the people. Tough time zone for trading, though. I'm really like out of it. In Asia, Bali, we have 56 schools. The people are so beautiful and pure and positive. Really good charity projects there and, frankly, a lot of amazing adventure in nature too Again, tough time zone. I gravitate towards Europe a lot. Every summer I go to the Amalfi Coast in Italy. Really good lifestyle, good time zone, good food. I go hiking a lot, so I'm actually healthier there.
Speaker 1:Dubai is actually blowing up right now. I used to hate coming to Dubai, but there's more and more traders here, more and more things to do Amazing, you know, food, hotels, activities. I love Africa, you know, just for the adventure, but it's a little tough. You know, I do love Cape Town, South Africa, Kenya and recently just went to Zimbabwe and Tanzania and Zanzibar too. So you know everyone's like, hey, just choose one place. But I think that as a trader specifically, you can travel everywhere. You know the Internet's only getting better and I think that it's really cool. I mean, my whole social media is like me on my laptop and I say hashtag laptop lifestyle and I trade from some crazy places.
Speaker 2:For those who want to track more of your thoughts, more of your work, Timothy, where would you point them to and maybe give a plug for why somebody should choose you and your way of thinking about things as opposed to other research services or traders out there?
Speaker 1:Well, I'm the weirdest person you'll ever meet, so I have that going for me. I don't think anybody else trades penny stocks in a cowardly way and, you know, promotes the cowardly way of trading these crazy stocks on a laptop. You know, I just have 25 years of experience. I don't think anybody should do anything they don't want to do, but I think that I have a very unique viewpoint and a lot of experience. And now, you know, 40 plus students have become millionaires. More are doing it.
Speaker 1:You know it's crazy just because of the hot market and I think that it's good to learn speculative trading strategies. Whether or not we get a big crash, I hope that we do Fingers crossed. Whether or not we go into a bear market, I hope that we do Fingers crossed. I think it's actually better to learn in a bear market. There's not as many plays. It's easier to study In a crazy bull market. People don't even want to study. They just want to make money because there's so many opportunities and you kind of lose out on the lessons and your education suffers.
Speaker 1:But to everyone watching this, I think that you should learn as many different strategies as you can and see what fits you and maybe take a little bit from every strategy. I have a lot of people who used to trade stocks. Now they trade crypto and they're like I still follow your chart patterns. I still follow, you know, cutting losses quickly. Whatever works for you. You know, like I say, that traders are all scientists. I say that traders are all scientists. There's no perfect formula and you have to try to find a formula that works for you, because we have different personalities, different strengths and weaknesses, different time zones, different account sizes, different goals, and you really, I do think, can make the stock market and whatever market work for you in your situation.
Speaker 1:But you have to really study. You have to know this stuff, even if you have a job, even if you're in school. You know, spend an hour at night every night, spend five hours on the weekend when you can. The more time you put into your education, the better you'll do eventually.
Speaker 1:I always say that you actually have two accounts your brokerage account and your knowledge account. Everyone always focuses on their brokerage account, but they never really think about their knowledge account. I think that you have to grow your knowledge account so much that it overflows when you have so much knowledge, like you can hear me talking about crazy stories from you know hundreds of years ago, because I've studied so much in history repeats, not in the exact same form, but very similarly. So I think that we all have to be students of the market and really students of ourselves and just keep learning, and I'm excited to share my lessons. I'm excited for platforms like this. You can follow at Timothy Sykes on every platform and don't DM me, because I have so many imposters and they'll just try to scam you with crypto.
Speaker 2:We share that in common. Appreciate that, timothy. Appreciate those that watch this live.
Speaker 1:Again this will be an edited podcast under lead lag live and I'll see you all on the next episode. Uh, thank you, let's get a crash you're gonna get a crash.
Speaker 2:Come on, michael, let's crash. I would love. It's so funny to me because people think that I'm like a perma bear and probably those listening to you would think the same way and it's like no, nobody ever said they would stay down.
Speaker 1:It's an option you need to really reinforce the fact that, like, when things go up too much for too long, it leads to an even bigger crash. We need some healthy consolidation. If we had some 10, 15 pullbacks along the way, I wouldn't be rooting for a crash because we would already have like little corrections. Right now we're just going up so much. I mean, it's actually crazy to compare a price of like crypto versus tulip mania. Tulip mania is like nothing. Yeah, okay, yeah. So that's again the self-fulfilling prophecy where people think, no, this time is different. Those are the four most expensive words in the english language. This time it's different. It's never different. Nothing is changing. It's different. It's never different. Nothing is changing, it's just madness.
Speaker 2:That's a good place to wrap this conversation up. Thank you, Brady, for watching. Thanks, Tim.
